The Dangerous Crowd

The trick to trading is seeing both sides of the ride and allowing for a margin of error.

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So come on VirginiaShow me a signSend up a signalI'll throw you the line.

(Billy Joel)

Good morning and welcome back to the party shack. I had a spiffy Real Estate Mailbag set to roll this morning but it didn't seem right with everyone dressed to the nines. With Breaking News to our left and Breaking News to our right, I thought we should follow up yesterday's Confetti Randoms with some forthright vibes. Minyans know that they'll get a truthful scoop in the 'Ville--right or wrong--and given the mindset of the market, some of our critters are bound to be bitter.

We know the drill--quarter-end is around the bend and there's a performance anxiety that would make Bob Dole blush. Further to that, alotta folks will be absent on Monday to kick off the new month (present company included). That begs the question and warrants the thought of "what if and what then?" Thin tapes lead to big moves and cumulative tension, coupled with media moxie, could make for a toxic mix.

I'm not smart enough to know whether this particular push by the Matador Crowd will turn the trick. In the four frames of trading--cycles, phases, trends and nuances--the latter matters are always toughest to game. But given the incessant bent of the headlines, my intent is to provide some balance for ye faithful. We've touched on the non-confirmations in the marketplace---here....here....here...here....and we've talked about some particularly delicate topics with regard to behind the scenes agendas. And while we know that the only right answer is found at the bottom line, my concern is that risk management has been forsaken in the chase for reward.

It's a familiar scene for some--we saw it in May and, for old schoolers, we remember it from years of yore. I'll again say that we all have a lot to gain from a bull market--the critters included--and I sincerely hope we share that journey. But I will simply say this---there's a massive difference between a legitimate economic expansion and higher equity prices. To understand where we are--and where we're going--we must appreciate how we've gotten here. Fat, drunk and stupid is no way to go through life, son, and debt, dependency and derivatives are not the stuff of sustainable trends.

I've shared my current positioning with Minyans so please understand that I'm not talking my book. I'm entering today's fray much the same way, with one eye on the tape and the other scanning the path for potential trap doors. Minyan Michael Santoli is always quick to remind me of something I said a few years ago. That if we look hard enough, we'll always find reasons to support any particular view. The trick to trading is seeing both sides of the ride and allowing for a margin of error. That's a good reminder at this particular juncture so thanks, Mike, on behalf of ye faithful.